1. in the absence of a partnership agreement, the law says that income and loss should be allocated

a. based on their length of time with the partnership

b. equally

c. according to their capital investments

d. based on salary allowances

2. the number of shares that a corporations charter allows it to sell is referred to as

a. authorized stock

b. outstanding stock

c. issued stock

d. common stock

3. shamrock company had a net income of $30,000. the weighted averager common shares outstanding were 8,000. the company declared a $2,800 dividend on its preferred stock. there were no other stock transactions. the companys earings per share is

a. $3.40

b. $3.75

c. $4.10

d. $7.86

4. a partnership had the following capital balances: Johnson, capital 20,000 Cox, Capital 60,000. the partnership agreement call for any profits to be split according to the partners capital balances. if net income is $50,000 how much is johnsons share of the profit?

a. $25000

b. $20000

c. $12,500

d. $37500

5. graceys department stores has $200,000 of 6% cumulative, nonparticipating preferred stock outstanding. graceys also has $600,000 of common stock outstanding. during its first year of operations, no dividends were paid. during the second year the company paid cash dividends of $30,000. this dividend should be distributed as follows.

a. $15000 preferred 15000 common

b. $6,000 preferred $24000 common

c. $12000 preferred, $18000 common

d. $24000, $6000 common

6. an unsecured bond backed only by the issuers credit standing is known as a

a. coupon bond

b. serial bond

c. debenture bond

d. bearer bond

7. an advantage of bond financing is

a. bonds do not affect owners control

b. interest on bonds is tax deductible

c. bonds can increase return on equity

d. all are correct

8. a compaby is issuing $500,000, 8% on 20 year bonds. if the market rate of interest (yield) is also 8%, then the bonds will sell for

a. a premium

b. a discount

c. face anount - $500,000

d. at amortization rate- $40,000

9. a company issues 5% , 20 year bonds with a par value of $600,000. the current market rate is 8%. the amount of interest owned to the bondholders for each semiannual interest payment is

a. $15,000

b. $48000

c. $30000

d. $24000

10. the partnership of jackson and brown has a profit or loss ratio of 1:4. if the net income for the year is $80,000, what is jacksons share of the partnership profits>

a. $20,000

b. $40000

c. $53333

d. $16000